June 2011 Newsletter

China and India lead the way in

GDP Growth

Kiplinger, 4-22-2011

Excess Housing Capacity in

Region

Events leading to the “housing bubble” of the last decade caused unnecessarily high housing costs, lost revenues to families and businesses, and stress on governments trying to provide services at an acceptable level. Avoiding a repeat occurrence begins with analyzing and publicizing data from the American Community Survey.

While “housing starts” traditionally support economic recovery, they currently cannot. Residential construction during the past decade proceeded without consideration for demand. Though plans were approved, units built, and many sold, the numbers far exceeded need. A growing supply of vacant housing delayed any boost in the demand for additional housing for several years.

During the 1990′s Ohio’s housing supply increased by 411,106 units while occupied housing units increased by 358,227, 87% of unit growth. The 2010 Census results show housing units increasing by 344,457 and households by 157,702; an excess of 200,000 units are a drag on the economy. The current slowdown in construction may allow households to increase more rapidly than units causing the excess inventory to shrink.

Excess Housing 2000-2009

Ohio Planners News – 4-11

Bill Leonard at

Manufacturing in Northeast Ohio

Our strength in manufacturing has powered the region’s recovery from the Great Depression, as factories revved up Northeast Ohio’s corporate revenues and profits. But these factories, and the companies that own them, are changing rapidly, in fundamental ways. Smaller plants making younger products- fueled by lots and lots of capital- will dominate manufacturing.

Northeast Ohio is a global center for the medical-imaging industry- a historical strength that now features local representation by five global competitors with deep supply chains.. We house critical facilities for Philips Medical, Hitachi and Siemens; M2M moved here from New Jersey, while ViewRay arrived from Florida. All together, they’ve invested some $369 million into the Northeast Ohio imaging industry. Why? Because these companies- and those in other sectors- bet on communities in which industry-specific talent, knowledge and innovation are readily available.

Advances in information technology and logistics- combined with the elimination of trade barriers around the globe- have allowed companies to fragment themselves into separate functions (production, product design, customer service, etc.) located thousands of miles away from each other. The days of low-wage, low-value-added factory jobs are gone along Lake Erie’s shores.

Our research indicates that regions that want to remain competitive in manufacturing must focus on two key functions that drive innovation and revenue: product design and development and headquarters and administrative functions. These functions not only drive corporate income, they also create the highest-paying jobs- with careers that tend to remain rooted in a particular place next to similarly focused firms, talent and capital. Eaton and Parker-Hannifin are two large examples, while MTD illustrates the importance of leading-edge product design and development in the lawn-care industry.

Bottom-line: Northeast Ohio retains a key legacy advantage in many industries.

Inside Business 1-11

Salaries: The Great Divide

CEO pay is rising again, outpacing the rest of us:

2% Pay increase for average worker in 2010

23% Increase in pay for CEO’s in 2010

$11.4 Million: Average CEO pay at top 200 Million firms.

Bureau of Labor Statistics; AFL-CIO

CSU, 2 other schools will explore civility in public discourse

Three Northeast Ohio universities have unveiled a program to explore rude, crude and downright unkind public discourse- and maybe find a way to do something about it. Officials at the University of Akron, the University of Mount Union and Cleveland State University announced at the Union Club in Cleveland that the collaboration would be the first of many joint projects.

Each institution is kicking in money to provide a stipend for at least one faculty member and student from its university to conduct the research this summer. The plan is for the partners to look at one issue each year.

Akron Beacon Journal 4-22-11

City Living

Young professionals are moving to or near big cities in a big way, according to an analysis of housing data for 2000-2009. In Cleveland, the number of 25-34 yr olds who have a 4 yr degree or higher and live within 3 miles of the city’s central business district rose 49% in the decade, representing a gain of 1,302 people. Here’s how Cleveland shapes up against selected other cities:

2005-2009 American Community Survey